Why is inventory important for an online store?


According to analysts, e-commerce is expected to account for 6% of the EU28’s GDP in 2020 (source: http://www.ecommerce-europe.eu/). This is a dynamically developing form of commerce in Hungary as well.

Hungary boasts commercial websites that use a number of different strategies, with the following being the most prevalent:

  • provide delivery to your home/a delivery point, or
  • in addition to delivery, provide a possibility for free receipt, or
  • display the inventory levels of their various products in their stores on their website.


All the solutions have one thing in common: the fact that the electronic availability of the actual stock figures is essential.


Why is knowledge of the exact physical quantity critical? How can that be guaranteed?

We have all made use of the possibilities offered by online stores in some form or another to decrease shopping times. The process always starts by browsing the internet. After making a choice based on inventory data, it is up to us to immediately choose to order the product or, if it is important to physically examine and hold the product, you can also check to see the store in which it is available and then make the purchase there, in the traditional manner.

If you choose to place your order, you expect to receive your purchase in time, based on the number of items in stock. If the data in the online store are not accurate, the few days may turn into weeks or even months.

This risks the all-important customer satisfaction. And a dissatisfied customer often results in endless administration and apologies, not to mention the bad reputation that starts spreading. As well-known, negative information is wont to spread up to 8 times as quickly as its positive counterpart.

The precise physical stock becomes even more important if the customer visits the selected store precisely for the purpose of buying the product supposedly in stock according to the website only to be disappointed because it is not in stock.

Each such event increases the number of dissatisfied customers, which may even lead to losing future customers due to uncertainty.

The popularity of the online store will decrease with the increase in the frequency of inventory disparities. So, was the system developed in vain?

No matter how automated it is, there are people behind every online store. And, as well know, “to err is human”. Even if your inventory management system is impeccable, there may be differences between reality and the IT data.


What is the solution?

In the interest of ensuring that the deviations come to light before the customer’s need arises, inventories should be performed in the warehouse with the necessary frequency and/or extraordinary (unexpected) inventories can also be used.


You can be in the forefront even if you don’t inventory the entire store/warehouse every week/month/quarter, but count only the products that are responsible for the majority of revenue: the Pareto or 80/20 principle is always applicable to the majority of commerce, according to which 80% of revenue is provided by 20% of activities/products. However, it is naturally a comprehensive inventory that guarantees the total accuracy of your online store.

Inventory may shed light on inventory shortages and allows you to correct disparities between actual and online (intentional or accidental) inventories.

The best tool for identifying inventory discrepancies caused intentionally is the quantitative stocktaking by objective third parties encoded in the process.

Using a surprise inventory provides an opportunity for the almost continuous physical control of inventory management. Objective, true data allow you to use a more effective inventory strategy. The reduction of stock discrepancies leads to improved customer satisfaction, meaning customers will turn to the store’s online platform with trust if they receive the product at the time communicated on the website. Moreover, the exact, true data allow you to use a better, more optimal strategy to decrease the possibility of having zero stocks.


By: Eszter Puskás, András Takács